a new approach to international cooperation

7/30/2019 A New Approach to International Cooperation

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Amsterdam, 30 November 2012

Authors: Herman Wijffels (Worldconnectors), Rolph van der Hoeven (ISS),

Jos van Gennip (Socires), Frans van den Boom (NCDO) and Gabi Spitz

(NCDO)

E-mail: [email protected]

A new approach to

international

cooperation

Threefold reform for threefold gain: innovation,

expansion and coordination as the basis for better

foreign policy


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ContentsIntroduction 31. A changing world 42. The added value of development cooperation 7

2.1. Dutch expertise 72.2. An international economy 7

3. Towards a National Commitment to international cooperation 93.1. A new agenda with broad support 93.2. Restructuring the aid channels 11

4. Global citizenship: the contribution of the various actors 124.1. Individuals 124.2. The private sector 124.3. The major philanthropists 134.4. Civil society organizations 13

5. Prerequirements and policy recommendations 145.1. Recommendations 14

6. A new role for DGIS 177. Conclusion 198. References 20


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Introduction

The new coalition agreement presents some striking reforms in the field of international cooperation.One ambition is to establish clearer links between policy addressing sustainability, poverty reductionand security. The creation of the new post of Minister for International Trade and DevelopmentCooperation underlines that there is indeed a relationship between international trade and poverty.However, the ambitious programme is accompanied by a 25% reduction in the developmentcooperation budget. It seems that the government hopes to do much more with much less funding. Inthis discussion paper, experts from the worlds of research, politics and the civil society propose a far-reaching reform of international cooperation. Innovation, expansion (in terms of both effort andresources) and stronger coordination are cited as the three strands which will combine to create aneffective, integrated approach to poverty reduction, sustainability and security. It must be rememberedthat international cooperation is not solely a government responsibility; it requires a nationalcommitment based on the principles of reciprocity, global solidarity and the equality of all people,everywhere.

In this discussion paper, we first describe the shifts and developments in the field of internationalcooperation before briefly examining the motives and objectives of the Netherlands involvement. Wethen propose a new agenda for international cooperation, examining the various aid channels and therole of the various actors. The paper concludes with recommendations for the practicalimplementation of the agenda, with a particular emphasis on coherence and coordination.


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1. A changing worldThe world is changing. While the emerging economies of Asia and elsewhere are experiencing stronggrowth, virtually the entire developed world is still in the grip of a global financial and economic crisis.The ongoing problems of the eurozone continue to have a marked effect in the Netherlands and farbeyond. Both the euro and the dollar are under pressure and there is great uncertainty about the long-term tenability of the international financial and monetary system.

Alongside these financial problems, ecological and social systems are being stretched to breakingpoint. Worldwide, we are using natural resources one-and-a-half times faster than the planet cangenerate them, while over two billion world citizens must live on an income of less than two dollars aday. In other words, we are plundering the earths resources to exhaustion, while a major proportion ofthe worlds population is denied the benefits. The current system, although responsible for muchprogress in the past, is burnt out and no longer fit for purpose. It is the source of loss and damage inso many areas. For the first time in history, mankind is now able to destroy the world in three differentways: nuclear weapons, exhausting the planets natural resources, and through unchecked pollution.An effective response demands international cooperation.

We may soon face even greater challenges. The worlds population continues to grow and is forecast toreach over nine billion by the year 2050. Each and every one of those nine billion people is entitled to ahumane existence. Population growth and the pursuit of prosperity can only increase demand forscarce resources such as oil, water and land for agriculture. To meet that demand calls for neworganizational forms and policy structures, particularly at the international level: the countries of theworld will become ever more interdependent as the issues of financial stability, resource managementand climate become more complex. Within this new reality, effective cooperation between and withincountries is crucial.

Given the shifts in global influence, the role and nature of international cooperation must also change.We can identify six key trends:1. Economic shifts: while the developed West will continue to see declining, perhaps negative growth,

the emerging economies will enjoy ongoing positive growth. Figure 1 shows a clear relationshipbetween the shifts in economic power and the volume of the money flows to the developingcountries. The value of official development assistance (ODA) is decreasing in relation to otherflows such as foreign direct investment (FDI) and the remittances made by migrant workers totheir countries of origin. The precise nature of the shifts varies according to the recipient country.For the very poorest countries, ODA remains a significant component of the foreign money flows.ODA represents an average of 10% of the Gross Domestic Product (GDP) of the low-incomecountries, while one in ten of those countries rely on ODA for at least 20% of their GDP (Kenny,2012). Clearly, development aid remains of great importance to these countries.

Figure 1: Money flows to the developing countries in billions of dollars (World Bank, 2012)

Although the financial situation in the West is cause for concern, and while global competition

for resources will increase, the current economic situation has some positive aspects. It is thecountries which were previously classed as poor which are now achieving greatest growth,while the rich countries are, at best, marking time. Accordingly, we see a more equal and


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equitable distribution of growth and the resultant prosperity. This applies not only to thefamiliar example of the BRIC countries, but to an increasing number of African states, notablyGhana. Growth (or future growth) in other developing countries creates new opportunities forthe Dutch economy. In terms of employment, the Netherlands is already reaping the rewards ofeconomic growth in China and India.

2.

Poverty is shifting to the middle-income countries.As we see in Figure 2, the problem of poverty isno longer confined to the low-income countries but, in absolute terms, can also be seen in themiddle-income countries. No fewer than three-quarters of the people living beneath theinternational poverty line are to be found in the emerging countries (Sumner, 2010). Almost halfof the worlds poor live in India (34%) and China (15%), countries which are known for theirspectacular growth figures. (Sumner, 2012.)

Figure 2: Shift of the worlds poor from the low-income countries to the middle-income countries (fromSumner, 2012)

3.

Poverty and associated problems are increasingly a distribution issue. The BRIC countriesdemonstrate that economic growth does not automatically lead to any reduction in inequality. Infact, inequality in these countries continues to rise, reflecting a worldwide trend. Inequalitybetween countries is indeed decreasing, but income inequality between individual citizens in oneand the same country has been increasing for many years. As the Dutch Scientific Council forGovernment Policy (WRR, 2010) and the Advisory Council on International Affairs (AIV, 2012)have stated, effective (complementary) policy is crucial to ensure that the benefits of economicgrowth are fairly distributed. In the low-income and middle-income countries, notably those ofLatin America where governments have prioritized policy to reduce inequality, some improvementcan now be seen (Melamed, 2011). In the BRIC countries, where bilateral aid relationships are nowof lesser importance, NGOs must now assume the lead in tackling inequality.

4. Shared global challenges. Issues such as financial instability, climate change and the depletion ofnatural resources are not confined by national borders. They are, however, of increasing urgency.Joint, targeted action and international cooperation are essential if we are to safeguard the globalpublic goods for all world citizens. The personal efforts of the individual are also important. Therising prices of food and natural resources, scarcity and natural degradation are all influenced to asignificant degree by consumer behaviour and ongoing population growth. People in theNetherlands have no reason to be complacent: if everyone in the world consumed resources at thesame rate as the average Dutch citizen, we would need 3.5 planet earths to meet the demand(WNF, 2012). It is evident that the urgency of these global challenges is increasing by the day, andthat they are closely linked to problems such as poverty and inequality. After all, increases in food,energy and water prices impact the very poorest more than others. The situation is furthercomplicated by a lack of agreement between the established rich countries and the emerging andpoorer countries with regard to the urgency of the sustainability agenda and appropriateresponses.

5. New forms of cooperation. The mandate for development cooperation no longer rests exclusivelywith the OECD-DAC countries and their governments. Increasingly, the development aid sector


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involves other actors: the large funding agencies and international charities, smaller privateinitiatives, migrant organizations and others. The BRIC countries have become important players.Brazil, Russia, India and China, themselves regarded as developing countries not so very long ago,now have their own development organizations which are actively involved in south-southcooperation. Brazils official development assistance (ODA) has risen by 20% since 2005, whileRussias contributions increased fourfold between 2006 and 2010 (GHSi, 2012). Much ofthis aid

is bilateral, but the new donor flows have also affected the multilateral channel. Until 2005, forexample, China received aid from the World Food Programme (WFP). It is now a major donor tothe WFP. Alongside a substantial ongoing contribution, in 2011 the Chinese government made anadditional donation of sixteen million dollars in response to the food crisis in the Horn of Africa.Nevertheless, in absolute figures, the total contribution of the BRIC countries remains limited. In2011, the western countries devoted 133.5 billion dollars to official development assistance, ofwhich approximately 40% was distributed through the multilateral channel (OECD, 2012). Eventhis figure is less than Europeans total annual expenditure on alcohol and tobacco. As yet, Brazil,Russia, India, China and South Africa (the BRICS countries) have not reported the amount of theiraid contributions to the OECD. The total amount in ODA (or similar) flows in 2009 is estimated tobe in the order of 1.75 billion dollars, primarily in the form of bilateral aid. Increasingly, therefore,the developing countries can now choose between various donors. The traditional donor countriesmust accept that they can no longer determine the form and implementation of recipient

countries development agendas.

6. Changes in the international arena. The emergence of the BRIC(S) countries as economic powersand donors has changed the multilateral playing field and its rules of play. Cynthia Roberts,writing in The European Financial Review (2011), states that the BRICS countries have in thespace of just five years become a recognized diplomatic group which has achieved much throughsoft power and can now offer a counterbalance to the traditional dominance of the West. This wasevident from the course and outcome of various recent international meetings, such as theCopenhagen Climate Conference and the environmental summit in Rio de Janeiro, at which thedeveloping and emerging countries made it perfectly clear that they were no longer willing to belectured to by the West. The traditional donor countries are losing their influence in theinternational arena. Global sustainability issues represent one area in which there are very diverseviews regarding both the urgency of action and the most appropriate form of that action. As aresult, it is extremely difficult to arrive at adequate international agreements.


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2. The added value of development cooperationBased on the trends described thus far, it is clear that a repositioning of international cooperation isessential if the global issues are to be addressed in an adequate manner. At the same time, all othermotives for involvement in international cooperation, such as solidarity with all world citizens, remainrelevant. There are, after all, hundreds of millions of people living in the most abject circumstances,with no access to basic welfare amenities and little prospect of a better future. One in seven people inthe world is hungry; every five seconds, a child dies as a direct result of poverty.

The Netherlands has a long tradition of international cooperation. It began providing formal financialaid as long ago as 1949, at the behest of the American president Harry S. Truman. During the 1970s,the development cooperation budget rose to 0.75% of GDP. This figure was in line with the normsuggested by the economist and Nobel Laureate Jan Tinbergen as necessary to stimulate economicgrowth in the poor countries, as endorsed by the World Council of Churches. In subsequent decades,the Netherlands emerged as a world leader and very influential player in the field of developmentcooperation and by the mid-1980s was devoting approximately 1% of GNP to international aid. It isnoteworthy that our country channels a large part of the development cooperation budget(approximately 20% in 2012) through private sector organizations such as ICCO, Oxfam Novib,Cordaid and Hivos (NCDO, 2012). By doing so, the Netherlands has developed expertise in otherimportant areas such as capacity building, civil society development and good governance.

In the last two years, however, the Netherlands has become at risk of losing its leading position in thefield of international cooperation. This is partly due to the governments swingeing austerity measures:the development cooperation budget for 2012 was 21% lower than in 2010, and a further 25%reduction has been announced for the years ahead. Another reason for the Netherlands having lostground is its uncooperative attitude. Rob de Wijk, an expert in international relations, noted recentlythat the Netherlands has courted the displeasure of the international community by stubbornlyrefusing to consider opposing views on sensitive issues such as the Hedwige Polder, the eurozone crisisand immigration rules.

2.1. Dutch expertiseIt is highly regrettable that the Netherlands is losing its leading position, not least because the Dutchhave much to offer the world in terms of expertise and experience. A report published by the WRR in2010 (Minder Pretentie, Meer Ambitie; Less pretention, more ambition) contends that the efficiencyof aid efforts is determined by the degree to which they are based on sound expertise. The added valueof Dutch development aid is derived from our knowledge and know-how in agriculture, watermanagement, justice, civil society development and HIV/Aids. Expertise in agriculture and watermanagement also creates opportunities for the Netherlands itself, since the growth in the worldpopulation will increase the demand for innovative solutions to ensure food security and access towater.

2.2.

An international economyThe Dutch economy has a strong international orientation. According to theInternationalizationMonitor (Statistics Netherlands; CBS, 2011) one in every ten Dutch companies engages in some formof international trade. The value of that trade accounts for almost 75% of the countrys GDP. A studyby the Netherlands Bureau for Economic Policy Analysis (CPB, 2009) concludes that the openness ofthe national economy accounts for additional per capita income of between 1200 and 1600 euros eachyear.

Of all companies active in the Netherlands, 1% are in foreign ownership. They account forapproximately 17% of national employment and some 25% of private sector profits. The Netherlands isthe global leader in terms of foreign direct investment (FDI). Private investments are of immenseimportance to the developing countries. Research has shown a clear link between investment levelsand economic growth (OECD, 2002). According to the IMFsCoordinated Direct Investment Survey,Dutch companies investments in international enterprises totalled 3,700 billion dollars at the end of2009. This figure is however distorted by the effects of the favourable fiscal climate in the Netherlands;approximately 75% of the Dutch FDIs to other countries are made by organizations which enjoy special
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fiscal status and exemptions (theBijzondere Fiscale Instellingen; BFIs). A reasonable estimate of FDIsfrom the Netherlands to developing and emerging countries would be in the order of 106 billiondollars.1 This is approximately seventeen times the national ODA budget and provided it is usedresponsibly can have a major positive impact on the social, economic and ecological welfare of thedeveloping countries and others.

Apart from the long-term benefits of international cooperation, such as the promotion of peace andsecurity, there are also short-term gains for the Netherlands. The Dutch private sector does goodbusiness with (former) aid recipients and international organizations such as the United Nations.According to the EVD (an official agency of the Ministry of Economic Affairs), partners and formerpartners such as Indonesia, Bangladesh, Vietnam and Ghana imported Dutch goods and services to avalue of over 1.5 billion euros in 2010. That is over a third of the current development cooperationbudget. The United Nations is also an important customer. In 2010, it purchased Dutch goods andservices to a total value of over 155 million dollars. The financial motive to engage in internationalcooperation therefore remains important, even or perhaps especially in the current financialclimate.

1When corrected for the BFIs, the Netherlands foreign direct investments were 950 billion dollars at year-end2009, approximately 25% of the total. Of all FDIs recorded at year-end 2010, almost 423 billion dollars weremade in businesses in the developing countries. Almost half, 193 billion dollars, represented investments in theBRICS countries. It is difficult to assess the exact value of FDIs from the Netherlands excluding the BFIcomponent, since the IMF gathers and compares only uncorrected data. However, if we assume that FDIs are

distorted by fiscal measures to the same extent as overall foreign direct investments, we arrive at a figure ofapproximately 106 billion dollars directed to developing and emerging countries (approximately 25% of the totalDutch FDIs in these countries).


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3. Towards a National Commitment tointernational cooperation

Although the economic, political, social and ecological importance of international cooperation isunderestimated by many, there is a groundswell of opinion, both within and beyond political circles,that the traditional form of development aid (ODA) is no longer appropriate given the shifts in globalinfluence and the issues now being faced. The coalition agreement presented in October by thePeoples Party for Democracy and Freedom (VVD) and Labour (PvdA), which together hold aparliamentary majority, therefore proposes a reform of Dutch international cooperation. The creationof the new post of Minister for Foreign Trade and Development Cooperation is an important step inthis direction. In this discussion paper, however, we contend that more ambitious and far-reachingreforms are both possible and essential if the required level of coherence and effectiveness is to beachieved.

3.1. A new agenda with broad supportThe great diversity of international actors (governments, NGOs, international organizations, majorphilanthropists, religious organizations, companies and private individuals), together with theincreasing urgency of many global and distribution issues, demands a new, overarching approach tointernational cooperation. In view of the political reality and the challenges which the Netherlandsnow faces, it is no longer appropriate to view development cooperation as a narrow government task,but as a broad national commitment based on a broad agenda. The proposed system embraces notonly traditional development aid (and the relevant budget), but also efforts in the areas of peace,security and sustainability. The discussion of the ODA norm is thus placed in a new context, whichincludes the Netherlands contribution to resolving global issues as part of the internationalcommunity.

Given the scale and urgency of the global challenges, traditional ODA is not adequately equipped toaddress issues such as climate change and financial instability. To do so calls for further resources,different financing forms and closer international cooperation. Severino and Ray (2009), researchersat the American Center for Global Development, use the term global policy finance. Theydifferentiate between financing economic convergence, financing access to basic welfare (through ODAor ODA-like channels) and financing (the management of) global public goods. Figure 3 offers anexample of how activities within these three areas can be financed by different societal actors. Thisconcept notwithstanding, ODA currently remains the only mechanism for financing internationalcooperation which can rely on broad support. In time, the principle of ODA must be replaced orsupplemented. Until that happens, it is crucial to observe the existing international agreements.

Figure 3: The pillars of Global Policy Finance (part of an illustration in Severino & Ray, 2009)

The three pillars proposed by Severino and Ray also offer a foundation for the development of theproposed national commitment to international cooperation. Within this system, the Dutch ODAbudget, together with donations from the general public, the business community and the lotteries,will be channelled through organizations dedicated to international development. The internationalefforts of other ministries concerned with social, economic and economic sustainability will also form

part of the broad international cooperation agenda. The Ministry of Infrastructure and theEnvironment, for example, has certain responsibilities with regard to climate change, while theMinistry of Defence is concerned with peace and security. Violent conflicts form one of the most


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serious obstacles to development, and the Netherlands itself will benefit from there being a stable, justand peaceful world. Ideally, all foreign policy which falls under the HGIS budget (Homogenous Groupfor International Cooperation) will be organized in a coherent way according to the three pillars ofeconomic convergence, access to basic human welfare and the management of global public goods.

In practice, the Netherlands contribution to development cooperation exceeds the established ODA

norm of 0.7% of GDP. According to the European Centre for Development Policy Management(ECDPM), the Netherlands total expenditure on development-related matters was in the order of 13billion dollars in 2010, almost 1.7% of GDP. This figure includes both the official government fundingflows and the private flows (Van Heukelom et al., 2012). If we consider only the current (2012) ODAbudget (2012), private donations, remittances by non-Western migrants, the international efforts ofthe Ministry of Infrastructure and the Environment, and the costs2 incurred by the Ministry of Defencein undertaking international peace-keeping missions, the total Dutch commitment to internationalcooperation is somewhat less at approximately 0.9% of GDP. Although the official development aidbudget still represents the lions share of this amount, the announced reduction in governmentexpenditure means that its contribution to a future national commitment will be somewhat lower.

National Commitment (government and private) Absolute in euros

Official development assistance (ODA) 4,340,000,000

Defence (crisis control operations and attachs) 233,996,000

HGIS (non-ODA): climate, water management, etc. 124,272,000

Private donations intended for international aid 572,000,000

Remittances 300,000,000

Total 5,570,268,000

Figure 4: Breakdown of minimum National Commitment for international cooperation

In financial terms, the Netherlands current commitment to international cooperation is estimated tobe between 0.9% and 1.7% of GDP. The components shown in the above table will primarily benefiteconomic convergence and access to basic human welfare, with a somewhat lesser effect in terms ofthe management of global public goods. Given the urgency of issues such as climate change andfinancial instability, it is crucial that the Netherlands adopts a far more ambitious approach in thisarea. Inge Kaul et al. (2003) point out that huge amounts are already being devoted to themanagement of global public goods, but that doing nothing will cost far more. As Figure 5 shows, thecosts of addressing the global issues cited (310 billion dollars) are considerably lower than thepotential costs of ignoring them (2,586 billion dollars).

Annualcosts ($)of

Financialstability

Multilateraltrade

Avoidabledisease

Stableclimate

Peace andsecurity

Inaction 50 bn 260 bn 1138 bn 780 bn 358 bn

Corrective

action 0,5 bn 20 bn 93 bn 125 bn 71 bn

Figure 5: Costs of inaction and corrective action with regard to global public goods (Kaul et al., 2003)

The figures in the above table date from 2003. The United Nations has since estimated that thestabilization of climate change alone will demand a contribution of 1% of GDP. It is therefore clear that0.9% of GDP, derived from all sources public and private, will not be enough to finance an integratedresponse to poverty, sustainability and economic development. ODA and similar flows will remainessential in combating poverty and inequality, but the current level of ODA expenditure representsonly a small fraction of the resources needed to administer the global public goods effectively. Thisapplies not only to the Netherlands, but to the combined international expenditure of all countries.

2 The Ministry of Defence distinguishes between fixed costs of maintaining manpower and resources, and theadditional costs of specific missions, such as staffing allowances, equipment repairs, storage, etc. The tableincludes only these additional costs.


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The current economic situation makes it very difficult to release more funds for internationaldevelopment, but innovative financing instruments and improved coherence offer viable alternatives.It is essential that the resources available are used more effectively, since the Netherlands will beaffected by all the global issues sooner or later.

3.2. Restructuring the aid channelsThe development cooperation budget represents a substantial proportion of the overall HGIS budget,which covers all government expenditure in matters of foreign policy. The development cooperationbudget for 2012 has been set at 4.34 billion euros, of which 28% is earmarked for bilateral aid and 29%for multilateral contributions. It is likely that this split will alter in the years ahead since it would beimpractical to spread the planned 25% cutback in overall expenditure evenly across all channels.

28%

29%

20%

9%

2%12%

Distribution of ODA by channel (2012)Bilateral

Multilateral

Civil society

organisations

Business

EKI

Other

Figure 6: Distribution of ODA by channel (BBO, 2012)

The proposed national commitment to international cooperation assumes that the distribution offunds via the various channels will be revised. Not every channel is suited to meeting specificobjectives. Based on Severino and Rays three pillars of Global Policy (Figure 3), each pillar or

objective can be directly linked to the most appropriate channel. Multilateral cooperation, for example,will provide the opportunities to address sustainability issues and manage the global public goods.Bilateral aid offers opportunities for cooperation in areas in which the donor countries have somespecial expertise. In the case of the Netherlands, those areas include agriculture, water, justice andjurisprudence, HIV/Aids and good governance. Other topics might better be left to other bilateraldonors or the multilateral organizations. The civil-lateral channel deserves special attention. The roleof civil society organizations in development cooperation is changing, but remains essential. As notedby the AIV (2012), bilateral development aid will become less significant in the emerging economies inthe light of their strong domestic growth. At the same time, poverty and inequality will continue to bemajor problems in these countries. Those civil society organizations which are concerned with capacitybuilding and strengthening the societal midfield will therefore have a particularly important part toplay in addressing distribution issues. Moreover, civil society organizations represent added value inthat they can provide aid in fragile states and conflict zones. Here, multilateral aid (other than direct

food aid and help for refugees) is often too cumbersome an instrument. Where there is no fullyfunctioning government apparatus, bilateral aid can often achieve relatively little. Civil societyorganizations are therefore best equipped to provide the necessary relief and assistance.


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4. Global citizenship: the contribution of thevarious actors

As noted above, the government is not the only actor involved in the Netherlands internationalcooperation efforts. Private sector companies, the major philanthropists and members of the publicand others are increasingly connected with each other and with their counterparts worldwide.Countless Dutch citizens are actively helping to create a better world. This is very important, sincegovernments efforts alone are not enough, in either quantity or quality, to provide an effectiveresponse to global issues such as climate change, scarcity and financial instability. The contributionwhich individuals, companies, philanthropists, religious organizations and others are making tointernational cooperation can, however, be used more effectively.

4.1. IndividualsThe Dutch public are actively involved with the rest of the world in many ways. They give generously togood causes. According to VU University Amsterdam, in 2009 Dutch charities received private

donations (including those from individuals, companies and lotteries) totalling 4.7 billion euros. Ofthis amount, 12% (572 million euros) was specifically intended to support international aid (Schuyt,2011). It should however be noted that some of the donations to church institutions (representing 19%of the total) and to organizations concerned with the environment (9%) also support internationalcooperation, either directly or indirectly.

The IS Barometer 2011 reveals that 75% of Dutch citizens made some contribution to developmentcooperation in 2010. This contribution can take various forms: donations of goods (40%), spontaneousfinancial donations (37%), taking part in a lottery (36%) or purchasing Fairtrade products (31%)(Hento, 2011).The international concern of the Dutch public is evident not only from generalconsumer behaviour, but in general attitudes: 64% consider development cooperation to be important,a significant majority (74%) follow the news about global issues, and approximately 75% regularlydiscuss poverty and environmental issues (Carabain, Van Gent & Boonstoppel, 2012).

Migrants make a contribution to Dutch society but also contribute to the development of their countryof origin through their remittances: money sent to their family. An NCDO study shows that non-Western migrants from the Antilles, Morocco Suriname and Turkey were responsible for a total of 300million euros in such remittances in 2009 (Carabain, 2011). This figure is broadly in line with anearlier estimate by the Ministry of Finance, which concluded that direct remittances to Surinam,Turkey, Morocco, the Antilles, Ghana and Somalia totalled approximately 365 million euros in 2005.

Last but not least, many Dutch citizens devote their time and energy to international cooperationefforts. MyWorld, the platform for private development cooperation initiatives, reports that there aresome eight thousand volunteer organizations in the Netherlands working to create a better world. Thesector organization Partos states that its 93 members have between 2,500 and 3,000 fulltime (orfulltime equivalent) professional staff. To this figure we must add the vast number of volunteersworking for good causes. The countrys 350 Wereldwinkel shops are run by no fewer than 12,500volunteers. This demonstrates broad acceptance of the notion that international cooperation is notsolely a matter for the government, but relies on the concerted efforts of society at large.

4.2. The private sectorPrivate sector companies trading practices and production methods play an important part ineconomic and social development, welfare and sustainability. The Advisory Council on InternationalAffairs (2012) identifies two specific roles for the private sector: to promote the adoption of legislationintended to improve the business climate, and to promote socially responsible enterprise, withparticular reference to chain responsibility. Many large Dutch companies, including Heineken, DSMand Unilever, are making an important contribution to sustainability and welfare throughout theworld. Rabobank has invested in local African banks, enabling them to offer their services to a broaderpublic using mobile phone apps and the internet. This type of initiative is crucial to welfare and thedevelopment of societal systems.


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As noted above, the Dutch private sector is investing many billions of euros in companies in thedeveloping countries. Although such foreign direct investment is indeed very important in terms ofeconomic development, there are potential hazards. The money could be used to fund perversepractices, such as misappropriation of land and environmental pollution. It is therefore crucial thatthe European regulations governing Coherence of Policy (whereby national policy must not frustrateor undermine development in other countries) are implemented and observed. It will then be possible

to use foreign direct investments and trade policy as effective development instruments. There is, ofcourse, government policy governing taxes, trade, natural resources, fisheries, agriculture andcountless other aspects of business. However, all Dutch companies must go beyond the formal rules toensure that their international activities promote sustainability and human rights to the greatestextent possible. They must also impose contractual terms and conditions to ensure that their suppliersdo likewise. The guidelines produced by the OECD provide a useful point of departure.

4.3. The major philanthropistsAccording to theDutch Wealth Report(2012), 1.3% of Dutch households have a net worth in excess ofone million euros. The average Dutch millionaire has assets of 2.9 million and as a group themillionaires own 39% of the countrys wealth (Van Lanschot, 2012). Millionaires tend to donate toideological causes, medical research and international aid. Their average annual charity contribution is2,763 euros, thirteen times higher than the man in the street. Donations exceeding 25,000 euros are

rare, made by only 2% of the millionaire group (VU University Amsterdam, 2011).

Unlike the United States, the Netherlands has very few major philanthropists who choose to supportinternational cooperation. There is no Dutch Gates, Gates, Rockefeller or Ford. Nevertheless, there area number of large donors, including the Van Leer Foundation which administers the trust set up by thelate industrialist Bernard van Leer. Each year it donates some 4.5% of current assets (approximately800 million euros in 2008) to good causes, mostly in countries other than the Netherlands. As longago as 2008, Rien van Gendt, executive trustee of the Van Leer Foundation, noted that thegovernments withdrawal from development cooperation created more room for private philanthropicinitiatives which could often achieve better results.

4.4. Civil society organizationsCivil society organizations have a crucial role to play in international cooperation, in both the emerging

economies and the fragile states. Such organizations also have great added value in the Netherlands:they raise public awareness of issues such as sustainable consumption and fair trade. For example,Oxfam Novib recently ran a successful campaign to ensure that the chocolate traditionally given tomark Sinterklaas is from certified Fairtrade sources.
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5. Prerequirements and policy recommendationsThe proposed broad approach is appropriate to the changing field of international cooperation, butcannot be achieved without stronger government coordination and a suitably ambitious agenda for allministries and departments. Severino and Ray (2009) point to the ongoing fragmentation of thedevelopment sector and describe a transition from collective action to hypercollective act ion. Infuture, the Western governments will not be in sole charge: those of the south, civil societyorganizations, small-scale private initiatives, major philanthropists, the business community and thegeneral public will all come to play a more prominent part in the changing international cooperationarena. Although it is desirable for each actor to have a well-defined and specific role, there are anumber of aspects which demand government coordination. Without any form of coordination, thevarious efforts may well prove counterproductive.

Further multilateralization is required to provide an effective response to the current globalchallenges. This applies equally at the European level. Aspects which call for coordination andstrategic management by the government include climate change mitigation and adaptation,arrangements for asylum seekers, international health care and global public health. There are variousother global public goods whose stewardship cannot be left entirely to the private sector: internationalsecurity, clean oceans, international justice and financial stability, to name but a few. Similarly, theinternational framework for poverty reduction is a matter for coordinated government intervention,particularly in terms of fair trade and sustainable production. The Sustainable Development Goalsadopted by the United Nations Conference on Sustainable Development (Rio+20) offer opportunitiesto create an international framework and a fully integrated approach to sustainable development andpoverty reduction.

5.1. RecommendationsThe desired coordination should not only ensure that the Netherlands contribution supplements theinternational efforts of organizations such as the UN and EU, but that the contribution itself, includingthe deployment of Dutch expertise, is fully visible. This is in our own interests. Coordination is alsorequired to ensure that national policy is fully in line with that of other countries, in all relevant policyfields. We therefore present ten recommendations for the reform of international cooperation policyand strategy.1. Replace the term official development assistance with national commitment to international

cooperation. This will make clear that all ministries and departments are involved in thegovernments international cooperation efforts, and that other actors within society also have asignificant role to play. Based on the combined contribution of the government, private sectorand the general public, the Netherlands should provide a national commitment of no less than2% of GDP. To ensure that resources (financial and otherwise) are used in a coherent andeffective manner, the Netherlands should take an active role in international cooperationaddressing economic convergence, access to basic welfare and the management of public goods.This will entail only a minor increase in the development-related public and private expenditureof 2010, which was assessed by the ECDPM (2012) to be just under 1.7% of GDP. Moreover, theadditional resources need not necessarily be drawn from the governmental budget but can beraised by means of innovative financing mechanisms (see Recommendation 8, below) andthrough the more effective use of foreign direct investments.

2. Invest in better coordination and coherence of policy. This is perhaps the most importantrecommendation of all: there can be no effective national programme without coherent policy.That policy must address not only the governments own activities in areas such as trade andagriculture, but also aspects such as companies production processes and consumer behaviour.If the Netherlands is to deploy its expertise where it is needed, and to do so as efficiently aspossible, coherent international policy is absolutely essential. It forms the very basis of effectiveinternational cooperation.

3. Devise a broad agenda for international cooperation. Many people associate the termdevelopment cooperation primarily with poverty reduction. However, global welfare relies on

more than economic development alone: it demands attention for sustainability and the creationof social amenities. The implementation of the agreements made at Rio+20 with regard to


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promoting a sustainable economy will do much to create a broad agenda for internationalcooperation: non-sustainable behaviour in one region or country has a negative impact in others.It is not only governments which must realize this, but all sections of society. By implementing theprinciples of the green economy at home, we shall create room for growth in the developingcountries.

4.

Multilateral cooperation should be made more prominent. The issues of distribution andmanagement of public goods cannot be solved through bilateral aid alone. Despite itsshortcomings, multilateral cooperation remains essential if such issues are to be addressed in astructured manner. Any intensification of multilateral cooperation should however beaccompanied by the reform and strengthening of the relevant organizations and channels. As theAdvisory Council on International Affairs noted in 2012, trilateral cooperation between the West,emerging economies and developing countries offers opportunities to work alongside the middle-income countries to enhance policy coherence and ensure that the global public goods are dulyprotected.

5. Work on international cooperation at the European level. The European Union is one of the threelargest economic powers in the world, and is the largest donor in the field of developmentcooperation. Like that of the Netherlands, the general prosperity of the EU is heavily reliant on

developments in the rest of the world, and vice versa. For reasons of efficiency and effectiveness, itis essential for the Netherlands and the other member states to work together in theirinternational cooperation efforts. Ideally, a pan-European policy will be developed, based on theprinciples of coherence, coordination and complementarity, with the specialist implementation ofthat policy taking place at the national level.

6. Focus on the fragile states. To date, the reforms of Dutch development policy have led to astronger focus on the productive sectors and on economic diplomacy designed to bring mutualbenefits. This detracts attention from the fragile states because they offer too few economicopportunities and represent too high a risk. However, it is essential that the Netherlands continuesits efforts to strengthen the fragile states, preferably in a multilateral context. It is precisely thesecountries, Mali being just one example, which are now faced with complex economic, ecologicaland social problems for which bilateral relationships alone cannot offer permanent solutions.Coordination between all donors is highly desirable: they should act in concert wherever possible.

7. The response to climate change should be given higher priority. The global response to climatechange seems to have reached an impasse; the agreements in place are not being observed, whilediplomatic wranglings are frustrating efforts to arrive at new agreements. It is, however, crystalclear that a stable climate is to everyones advantage, and is particularly important to low-lyingdelta regions such as the Netherlands. The Dutch government must therefore continue to press foran effective global response to climate change. Meanwhile, it should implement all possiblemitigation and adaptation measures further to national and European policy.

8. Implement innovative financing mechanisms. Innovative financing instruments have beensuccessfully applied in international health care for several years. There are many opportunities touse similar arrangements to support the management of global public goods. The Netherlandscould, for example, follow Frances example and impose a solidarity levy on air tickets. Otherpossibilities include meso-loans for small and medium enterprises, and peer-to-peer loansbetween companies or NGOs. It also seems prudent to channel revenue raised by the proposedFinancial Transaction Tax (FTT) into a European fund to be used for climate mitigation. In theabsence of adequate international policy, this represents a quick win.

9. Acknowledge the need for disparallel space. Policy governing foreign trade must not stand in theway of economic development in the poorer countries; vulnerable economies should be given extraspace. The developing countries might, for example, be permitted to introduce market protectionmeasures on a temporary basis, while the Western countries open their markets to all. Moreover,the developing countries should be given better access to (intellectual) property rights, not least inthe area of health care and prescription drugs. Based on the principle of reciprocity, it is notmorally defensible to monopolize knowledge when large groups of people face life-threateningdiseases, climate risks and major economic challenges..


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10.Peace-keeping operations must continue as an intrinsic part of international cooperation.Warand conflict form a serious obstacle to progress, and can quickly negate any gains already made.Violence in any form precludes the development of ecological, social and economic sustainability.The people of South Sudan have been forced to rebuild their lives time after time; sustainableprogress is virtually impossible. Those who cannot sow cannot reap.


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6.A new role for DGISInternational cooperation when undertaken by Dutch society as a whole demands strategicmanagement and visionary policy. Ideally, the Directorate-General for International Cooperation(DGIS), part of the Ministry of Foreign Affairs, will provide both. In addition to administering the ODAbudget, it will then have two key tasks, both of which involve coordination. The first is at theinterdepartmental level, whereby DGIS will ensure effective use of the resources and manpower ofother departments and oversee policy coherence. The second task is equally important; DGIS cancreate appropriate frameworks and facilitate the role of the societal midfield. If internationalcooperation is to become a matter for society at large, there must also be a broad dialogue, with thevarious actors receiving the necessary encouragement. This too is an appropriate task for DGIS.

The current issues within the international cooperation arena are not confined to the traditionalportfolio of Foreign Affairs but involve many areas of policy. It is therefore essential that thegovernment has an international development agenda which involves all relevant ministries anddepartments. The decision to create the new post of Minister for Foreign Trade and DevelopmentCooperation must be applauded, all the more so because its holder forms part of the cabinet itself. Allofficials and policy makers must take into account the influence of the European Union, both as asource of policy and a partner. Similarly, the multilateral system must no longer be compartmentalizedand hidden away within the DGIS apparatus, but mainstreamed whereby the relationship with eachof the international policy fields is recognized and respected. An innovative approach to internationalcooperation policy will enable the Netherlands to establish a strong profile on the international stage,an opportunity which must not be allowed to pass. Accordingly, DGIS must be given the mandate andthe resources needed to re-establish the Netherlands reputation as a leader in internationalcooperation.

The proposed new approach to international cooperation demands a new set of skills andcompetencies. Overseas diplomatic missions will also play a key part in implementing the new agenda,taking on the role of broker between local actors and the public and private sectors in the

Netherlands. To ensure that this task is fulfilled properly, it is important to investigate the role that themissions can continue to play in the former partner countries which have now achieved economicindependence. Hopefully, the Netherlands will now be able to reap the rewards of our longrelationships with these countries, and the knowledge and networks we have built over the course ofmany years.

Main recommendations in terms of organization:1. Strengthening of DGIS. A broad approach to international cooperation demands a new, more

prominent role for DGIS. It must become a recognizable and visionary coordination centre witha clear mandate, along the lines of the United Kingdoms Department for InternationalDevelopment (DFID). This entails a fundamental transformation of the organizational structure,as well as more effective use of the expertise made available by research institutes andthinktanks in the Netherlands and elsewhere.

2. Competency development. The implementation of a successful national programme which enjoysthe envisaged level of support demands new skills and competencies both within and beyondDGIS. The development of these competencies can be encouraged by the use of career columns,whereby promotion depends on both practical and theoretical expertise in areas such asimplementation and evaluation.

3. An interdepartmental agenda. The proposed new approach to international cooperation can onlysucceed if it enjoys the full support of all ministries and departments, all of which should beworking according to the same coordinated agenda. The Minister for Overseas Trade andDevelopment Cooperation must have the authority to devise, coordinate and if necessary correctthe policy of other departments. This also entails greater authority in the budgetary context.


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4. Organizing for emergence. When developing policy in general, and that addressing internationalcooperation in particular, it will be prudent to leave room for adaptation should new issues ordevelopments emerge. For example, the final form of the post-Millennium Development Goalsagenda remains unclear at this time, as does that of the post-Rio agenda. Similarly, the outcome ofthe international trade negotiations cannot be predicted with any degree of certainty. The principleof organizing for emergence allows unforeseen developments to be accommodated.

5. Interaction with the research field. The proposed restructuring of international cooperationefforts to become a national undertaking, and with it the ambition of taking a prominent andrelevant place on the world stage, cannot be achieved without close cooperation between policyresearch and policy implementation. There must be an ongoing dialogue between the government,the private sector, the civil society, academics and researchers from the leading institutes. In otherwords, there must be intensive cooperation with the existing institutes, together with furtherdevelopment of the knowledge platforms concerned with the spearheads of government policyand the top economic sectors. The Scientific Council for Government Policy has also called foracademic involvement of a more general nature, whereby policy development can be linked to theresearch capacity in the Netherlands itself, and to relevant international developments. It would bepossible for the existing institutes to fulfil this role within a network structure. In keeping with thecontents of this discussion paper, the golden triangle of private sector, government and the

research field should be expanded to include the civil society organizations.

Political supportAlthough political discussions are currently dominated by the economic situation, there is clearsupport for the proposal of transforming and intensifying the Netherlands role in internationalcooperation. Prior to the general election of September 2012, NCDO analysed the various partymanifestos and found that most were strongly in favour of retaining the development cooperationbudget. The Christian Democrat Alliance, D66 and the Reformed Political Party (SGP) called for thebudget to remain at its current level of 0.7% of GDP, while Labour, the Socialist Party (SP), Green Left,the Christian Union and the Party for the Animals wished to see the budget increased. Only thePeoples Party for Democracy and Freedom (VVD) and the Party for Freedom (PVV) proposed areduction in the budget. Most party manifestos also state that better policy coherence is required,which calls for efforts at the EU level. Labour, Green Left and the Christian Union draw attention to

the need for an interdepartmental agenda.


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7. ConclusionThis discussion paper calls for a radical reform of the Netherlands approach to internationalcooperation, based on the principle of reciprocity. International cooperation whereby we assist othercountries on their own path to development is undeniably in the Netherlands own national andeconomic interests. We may be an important trading nation, but geographically and demographicallywe are small fry. Our relationships with other countries are of great value in all senses of the word.Further international cooperation in the economic, social and ecological areas is essential to theNetherlands ongoing prosperity and the welfare ofits people. The creation of a stable, just andsustainable world will greatly benefit Dutch society and the national economy.

In a changing world full of new players, new systems and urgent global issues, the traditional bilateralform of international cooperation is no longer the most appropriate. It offers too few opportunities toaddress the complex and pressing issues within a particular country, and offers no response to widerproblems such as financial instability, climate change, infectious diseases, etc. Furthermultilateralization is essential if we are to address todays global sustainability issues effectively beforeit is too late. At the same time, the efforts of civil society organizations will remain crucial in tacklinginequality in the middle-income countries and in providing emergency relief in fragile states.

Efforts to reduce poverty and inequality remain essential in a world in which hundreds of millions ofpeople are denied the benefits of globalization. Indeed, many have become the victims of globalization.The fragmentation of the development sector, in which not only governments but private sectorcompanies, civil society organizations, philanthropists and individual members of the public are active,calls for a new and broader system of coordination. This will enable the activities of Dutch companiesand individuals make a real difference in terms of welfare and well-being elsewhere in the world.Rather than focus exclusively on official development aid, the government must turn its attention tocoordinating and facilitating a national commitment which address the three pillars of economicconvergence, access to basic welfare and the management of global public goods. The successfulimplementation of such a broad agenda will depend on there being fully coherent policy. Only then can

the contribution of the various actors be used effectively and efficiently.

To design, implement and direct this national programme demands a recognizable and visionarycoordinator: a spider in the web. This will be the new role of DGIS. Skills and competences can bedeveloped by means of career columns. If the Netherlands is able to modernize its policy and providethe necessary resources for international cooperation, it will once again assume the role of leaderwithin Europe and indeed the wider international arena. This will greatly enhance its reputation andstanding.

The proposed threefold reform (policy innovation geared towards coherence, expansion to includesociety at large rather than the government alone, and professionalization to achieve bettercoordination) will have threefold gains. Foreign policy will be more efficient and coherent. Theeconomic relationships with other countries will be strengthened, and the Netherlands will be able to

reposition itself within the international arena. Moreover, the Netherlands and its people will behelping to create a just, sustainable and stable global society.


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